Retailers choose sides in Alibaba-Tencent battle in China

24 Feb '18
2 min read

Two big Chinese firms— Alibaba Group Holding Ltd and Tencent Holdings Ltd — are reportedly on a retail investment spree in battle mood, resulting in merchants having to choose sides. The clash, which began in early 2017, has seen the two firms spending more than $10 billion on retail-focused deals, boosting their reach online and in brick-and-mortar stores.

The two firms are competing in payment, logistics, social media and big data services. Retailers are worried that if they do not take sides, they may perish in future, according to a report by CNBC.com.

Alibaba is the country’s biggest player in e-commerce player and its sister concern Ant Financial leads in mobile payments. Tencent is a big player in social media, digital payment and gaming and has a huge stake in the second-largest online retailer JD.com.

French grocer Carrefour SA and US retail giant Walmart are allies of Tencent and JD.com. Tencent also has a stake in Yonghui Superstores Co Ltd, apparel retailers Vipshop Holdings Ltd and Heilan Home, mall operator Wanda Commercial.

Alibaba has invested heavily in Suning.com>, Intime Retail, Sanjiang Shopping Club, Lianhua Supermarket, Wanda Film and home improvement store Easyhome.

In China's $13-trillion mobile payment market is a key battlefield for the two. Ant operates China's top mobile payment platform, Alipay, while Tencent's payment system on its popular Weixin chat app is catching up fast. Both firms are also making a big push in cloud computing and data.

Both the companies also want a slice of the brick-and-mortar store segment in China that accounts for about 85 per cent of retail sales. The stores benefit like access to payment systems, logistics networks and consumer data maintained by these companies.

Alibaba invested $486 million recently in a retail-focused big data firm with an aim to capture brick-and-mortar retailers in the digital age. (DS)

Fibre2Fashion News Desk – India

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